Supply and demand traders can get so caught up in their "zone" methodology that they forget about everything else.
In this segment I'll present a pattern of analysis that can be used to pick apart a chart and clarify areas logical for trading.
This GBPUSD 30 min chart clearly shows an uptrend followed by a downtrend. I'll take the turn from up to down and zoom in a bit. Next chart.
Notice on the left green pointer 1 and 2. Both of these bullish bars are wide range bars (WRB) and they are gaps.
A WRB is a bar that is larger than the previous 3 bars. Its nice when it significantly larger. A gap is when the high of the bar previous to the gap bar and the low of the bar after the WRB do not meet.
Notice as price falls on the right blue pointer 1 and blue pointer 2. These are bearish WRB gaps.
WRB gaps represent significant evidence of supply or demand. When this bars appear one should ask:
1. What did the WRB take out to its left?
2. Did it take out a swing, a shelf, a coil, etc?
WRB gaps not only represent evidence of significant supply and demand, they also indicate significant EFFORT. So ask yourself what did that effort do?
See next post for further explanation
In this segment I'll present a pattern of analysis that can be used to pick apart a chart and clarify areas logical for trading.
This GBPUSD 30 min chart clearly shows an uptrend followed by a downtrend. I'll take the turn from up to down and zoom in a bit. Next chart.
Notice on the left green pointer 1 and 2. Both of these bullish bars are wide range bars (WRB) and they are gaps.
A WRB is a bar that is larger than the previous 3 bars. Its nice when it significantly larger. A gap is when the high of the bar previous to the gap bar and the low of the bar after the WRB do not meet.
Notice as price falls on the right blue pointer 1 and blue pointer 2. These are bearish WRB gaps.
WRB gaps represent significant evidence of supply or demand. When this bars appear one should ask:
1. What did the WRB take out to its left?
2. Did it take out a swing, a shelf, a coil, etc?
WRB gaps not only represent evidence of significant supply and demand, they also indicate significant EFFORT. So ask yourself what did that effort do?
See next post for further explanation
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